The explosion in sales of new Teslas during the period was bittersweet. It was the result of customers front-loading their purchases of electric vehicles before government subsidies were removed at the end of September – an unwelcome part of Donald Trump’s One Big Beautiful Bill Act.
The bitter part is that bringing forward these EV purchases will now result in significantly softer sales for Tesla over the next few quarters.
Elon Musk introduces a prototype humanoid robot during a Tesla livestream.
It explains why Musk doesn’t want investors to call Tesla a carmaker anymore. There are plenty of EVs on the market, and some of those made in China boast sales growth and market share that would make Tesla envious.
Those now investing in Tesla are far less focused on the Model Y or the Model S and are instead punting on whether Musk’s revolutionary AI dream will become a reality.
Among the aspirations Musk has mentioned is Tesla’s Optimus robot becoming the “biggest product of all time”.
That’s the kind of hyperbole that gets the Tesla true believers and Musk’s acolytes excited. For the rest of us, Tesla’s progress to date on automation and AI would suggest that populating the world with robots and self-driving taxis seems more a pipe dream than a concrete evolution of the business.
So investors in Tesla today have to take a leap of faith that Musk’s vision for the company will come good at some point to justify its current share price. Tesla’s price-to-earnings ratio sits at 254 times (the median among US stocks is 27 times). Without boring you with the mechanics of this metric, it signals there is an expectation of a supercharged profit down the track.
Elon Musk at the robotaxi event “We, Robot”, last October. Former Tesla executives say the company’s self-driving system is not good enough to be trusted.Credit: Tesla
That proposed $US1 trillion payday for Musk will be voted on by shareholders next month. But to get it, Musk will need to hit a series of ambitious targets over the next decade, including delivering 20 million vehicles, 1 million robotaxis in commercial operation, and Tesla’s value topping $US8.5 trillion.
And let’s not forget the robot army – he will also need to deliver 1 million Optimus humanoid robots.
Musk is never short on confidence and no stranger to spruiking the virtues of his vision for Tesla and the world.
In July this year, Musk posted that the company could be worth $US20 trillion – which is more than 20 times the current value of the world’s largest company, Nvidia.
Which all sounds lovely, until you wake up to the reality of how Tesla is placed right now and where it’s headed.
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